THE ATTOHNET GENERAL OF TEXxUS

May6,1988

Honorable Garry Mauro Chairman Veterans Land Board 1700N. Congress Austin, Texas 78701 Opinion No. JM-897
Re: Additional questions relevant to Attorney General Opinion JM-774 (1987)onpaidin-full deed fee on contracts subject to Veterans Land Act (RQ-1275)

DearMr. Mauro:
You ask:
1. May theVeterans Land Board impose a paid-in-full deed feeon [veterans' land] contracts entered into before 1961 but assumed by anewpurchaser after 1961? All contract assignments since 1961 are made subject to the Veterans Land Act, 'as amended.'

the"&r%t""%SO Veterans Land impose paid-in-full izzi" fee on contracts or assignments of contracts entered into after 1961 or is the board limited to the feeauthorized by statute at the time the contract isentered into?

As you indicated in your request, these questions relate to the question dealt with in Attorney General Opinion JM-774 (1987). There, we ruled that imposition of a paid-in-full deed fee,which was not adopted by statute or rule until 1961, would constitute an unconstitutional impairment of contracts if applied to contracts made before 1961when no such feewas provided forby statute orby rule. U.S. Const. art. I, 510. See also Tex. Const. art. I, 516.

Inour opinion, the issues you nowpresent are for themost part resolved by reference toJM-774 (1987) and the authorities cited there. Absent clear agreement to

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the contrary, parties to acontract arebound by the terms of the contract entered into andby the laws relating to its subject matter that are in effect at the time of its making.
Attorney General Opinion JM-774 held that as the pre-1961 contracts themselves and the statutes and rules then in effect were silent as to the purchasers1 obligations topay apaid-in-full deed fee, imposition of paid-in-full deed fees set by later statutes or rules would unconstitutionally impair the contracts. Regarding post-1961 contracts as well, the contract's own terms taken together with the statutes and rules ineffect at the time of itsmaking govern the obligations under the contract absent clear agreement to the contrary.
We note that the relevant provisions contained inthe sample original contracts wehave seen consist of:

1. statements that the contract is made pursuant to a statute (currently chapter 161 of the Natural Resources Code) and rules adopted by theVeterans Land Board;
2. statements that the parties are bound by the provisions of such statutes and rules; and
3. statements that the statute, 'as amended,' shall be binding on the parties.

It isour opinion thatwhere there are no provisions regarding controlling statutes, orwhere there isa citation of a statute, or of a statute 'Ias amended," the controlling law can only be that in effect, and "as amended," at the time the contract was made.1 In such ?

1. "Asamended" could arguably be deemed to refer to the statute and rules as they will be amended inthe future. But in light of the rule that ambiguous contract language is construed against the drafter thereof (the board here), and given that "as amended" is standard language appended to references to an act or rule to indicate as amended to the vresent, we consider that a 1 contract statement that the purchaser or assignee is subject to an act or rule "as amended" can, in itself, (Footnote Continued) ?

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cases, to apply to the contract a fee statute or rule enacted orpromulgated after themaking of the contract would unconstitutionally impair it.

None of the exceptions to the impairment rule set out inJM-774, e.a., inthe cases where legislative enactments are inthe "public interest," orwhere the exceptions turn on the distinction between impairment of rights and impairment of remedies, are anymore apposite here than theywere held to be inthe context of the very similar issues presented inAttorney General Opinion JM-774. Thus, it is our opinion that original contracts, making references to the controlling statutes in the manner indicated above, and executed after 1961, are subject only to the feewhich was provided forby the statute or rule at the time the contract wasmade.

You also askwhat paid-in-full deed fees, if any, assignees of such contracts could bemade liable for. From the foregoing discussion, it follows that an assignment contract referencing the controlling statute and rules as theywere referenced inthe original contract provisions discussed above does not subject the assignee to fees or fee increases enacted orpromulgated after the assignment wasmade.
The issue, then, is whether the assignee is subject to the law in force at the time of the assignment or to that in force at the time the original contract was made, with respect to the deed fee, where the assignment contract made reference to controlling statutes or rules inthemanner discussed above with respect to the original contracts. We feel that determination of this issue may bemade only with reference to particular contracts and pertinent rules: what paid-in-full deed fee, ifany, an assignee may be made liable fordepends onwhether the particular assignment and underlying contract, taken together with thepertinent statutes and rules, show that the assignment constituted anew contract with respect to the obligation of the assignee topay adeed fee, or show awaiver by the assignee of the right under the original

(Footnote Continued) only bind thepurchaser or assignee to the provisions of such act or rules asamended up to the time of themaking of the contract.

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contract to obtain the deedwithout paying a fee or increased fee,etc. ? We note, however, that, in examining the various sample contracts and assignments supplied by theboard to usper our request,we have found some sample assignment contracts which provide that the assignee "agrees to comply with the statutes, rules and regulations governing theVeterans Land Board, as thev mav be. from time to &&@I1 (emphasis added). We think that by assenting to such provisions in the assignment contract, an assignee could bedeemed to obligate himself topaywhatever deed fee is in effect under rule or statute at the time he obtains his paid-in-full deed. Again, though, the overall effect of an assignment transaction can only be determined by reference to the assignment contract as awhole, the underlying original contract, andpertinent statutes and rules ineffect atall relevant times. It is inany case our opinion that an assignee (or original purchaser for thatmatter, although we have seen no original contracts referring to future controlling statutes and rules as do the sample assignment contracts mentioned above) could obligate himself topay the fee ineffect at the time he obtains his deed inthe future where the contract clearly ? indicates such. See, e.aii1Newman v. Suvreme Lodae, Kniahts of Pvthias, 70So. (Miss. 1915).
SUMMARY
The extent of the obligation of purchaser or assignee under aveterans lanz contract topay a paid-in-full deed fee is determined by the pertinent statutes and rules ineffect at the time of themaking of the contract, unless the contract documents clearly show theparties' agreement to be subject to paid-in-full deed fees as they are ineffect subsequently.
Whether an assignee, under an assignment contract not clearly indicating the parties agreement to be bound bydeed fees as they will be in effect in the future, is obligated topay the deed fee ineffect at the time of the original contract or to pay that ineffect at the time of the assignment depends onwhether allpertinent documents and rules taken together indicate that the assignment contract is anew contract at leastwith respect to the deed fee, that the ?

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assignee has waived a right under the original contract to obtain the deed without paying a feeor increased fee, etc.
Where acontract soprovides, apurchaser or assignee may obligate himself topay a deed feeenacted orpromulgated at a time subsequent to themaking of the contract.

JIM MATTOX Attorney General of Texas
MARY KELLER First Assistant Attorney General

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LOUMCCRRARY Executive Assistant Attorney General
JUDGE ZOLLIE STEAKLEY Special Assistant Attorney General
RICK GILPIN Chairman, Opinion Committee Prepared byWilliam Walker Assistant Attorney General

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